User Account

All Pages

Ortizs cfo has calculated the companys wacc as 996 percent

Assignment Help Finance Basics
Reference no: EM13478341

David Ortiz Motors has a target capital structure of 40 percent debt and 60 percent equity. The yield to maturity on the company's outstanding bonds is 9 percent, and company's tax rate is 40 percent. Ortiz's CFO has calculated the company's WACC as 9.96 percent. What is the company's cost of equity? If the company will pay a constant annual dividend of $2.20 a share, what is the Ortiz's current stock price?

Reference no: EM13478341

Questions Cloud

Trees will mature in 10 years at which time : washington-pacific invests 4 million to clear a tract of land and to set out some young pine trees. the trees will
Discuss using a specific example from a recognized : religious food taboos have less to do with health or nutrition and more to do with the control of subjects within an
The firm pays out all earnings as dividends hence its stock : craig company has a market value of 100m consisting of 1m shares selling for 50 per share and 50m of 10 perpetual bonds
Hanebury corporations current sales were 12 million sales : hanebury corporations current sales were 12 million. sales were 6 million 5 years earlier.a. to the nearest percentage
Ortizs cfo has calculated the companys wacc as 996 percent : david ortiz motors has a target capital structure of 40 percent debt and 60 percent equity. the yield to maturity on
The company has 100 million of long-term debt plus : home mortgage corp. forecasts the free cash flows in millions shown below. the weighted average cost of capital is 13.0
What rate of return should the company require on projects : gamma biosciences is financed entirely with equity. its beta is 1.5 and its price-earnings ratio is 16. the current
Set up the amortization schedule for a 25000 loan to be : a. set up an amortization schedule for a 25000 loan to be repaid in equal installments at the end of each of the next
Could choice of banks be influenced by fact which you might : universal bank pays 7 percent interest compounded annually on time deposits. regional bank pays 6 percent interest

Reviews

Write a Review

Finance Basics Questions & Answers

  What is progressive cost of equity and corporate cost

The CFO estimates that the present value of any future financial distress costs is $8 million, and that the probability of distress increases with the amount of debt in the following steps.

  Explain capital budgeting involves calculation of npv

Explain Capital budgeting involves calculation of IRR, NPV, Payback period and If the required return is greater than the coupon rate

  Write the modified equations for equity and net sales

The text mentions that with modifications to the equations for equity and net sales, the fore-cast can easily be extended through 2010. Write the modified equations for equity and net sales.

  50-50 partnership

Hanna and Molly form a 50-50 partnership, each contributing $75,000. The partnership buys as an investment a portfolio of non-dividend paying corporate stock. After 10 years, during which the partnership continues the original portfolio, the portfoli..

  Future competitive success of southwest airlines

Write down the major factors for the future competitive success of southwest airlines.

  What is the expected standard deviation for a share

George is considering an investment in Vandelay Inc. and has gathered the information in the following table. What is the expected standard deviation for a share of the firm's stock?

  Time value of money-retirement fund

Kay Mart owns an annuity that will begin making semiannual payments of $7500 in perpetuity to her or her heirs. The first payment will take place 3 years and 6 months from today. She is considering selling the annuity to an investor whose required..

  Standard deviation of returns of third company share is low

Provide suitable example of three companies with workings out of how third company has greater required rate of return even if standard deviation of returns of third company share is lower.

  What is the tie ratio

The H.R. picket corp has 500,000 of debt outstanding, and it pays an annual interest rate of 10%. Its annual sales are 2 million, its average tax rate is 30% and its profit margin is 5%. what is the TIE ratio?

  What is the cash flow recovery from net working capital

What is the cash flow recovery from net working capital at the end of this project?

  Suggest the potential benefits of the domestic securities

below is what i need.nbsp it only have to be a feww lines.discuss the key benefits of a company investing and trading

  Discuss the importance of implementation

Discuss the importance of implementation and monitoring in problem solving.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd